Saudi Arabia will withdraw its Arab League monitors from Syria, with the Gulf states expected to follow in a potentially fatal blow to the contentious mission.

The decision was taken minutes after the Arab League decided to persist with the observers and extend its mission for another month, ignoring demands for it to hand responsibility for monitoring the crisis in Syria to the UN security council.

At a meeting in Cairo on Sunday, foreign ministers from the 22 Arab League member states were divided over the mission's accomplishments so far, and faced pressure to admit it had failed.

Ministers made a joint statement demanding Syrian president Bashar al-Assad surrender power to a deputy and form a national unity government in Syria.

The Saudi intervention appeared to be intended to assert its authority in the escalating crisis and seize responsibility from Qatar, which Riyadh and the Gulf Co-operation Council states believe has allowed Damascus to dictate terms.

The Saudi foreign minister, Prince Saud al-Faisal, accused the Syrian regime of acting in bad faith and not implementing any of its obligations, spelled out in the Arab League resolution that cleared the path for the mission almost three months ago.

"My country will withdraw its monitors because the Syrian government did not execute any of the elements of the Arab resolution plan," he said.

"We are calling on the international community to bear its responsibility, and that includes our brothers in Islamic states and our friends in Russia, China, Europe and the United States."

The minister said "all possible pressure" was necessary to compel Syria to fall in behind the Arab peace plan, which was drafted as a blueprint to tackle the 10-month revolt that has taken Syria to the brink of civil war.

Qatar called for a full review of the Arab League mission – a move expected to pave the way for Gulf states to follow the Saudi lead. The tiny Gulf state had earlier urged Arab troops to be sent to Syria in an effort to quell the violence.

It made the call again during the meeting of foreign ministers on Sunday, but Sudan, Egypt and Algeria objected.

The Cairo summit was marked by heated and at times bitter debate on Syria, the fate of which threatens the stability of many of the 22 Arab League member states - and the credibility of the peak organisation itself.

There was no immediate reaction from Damascus. The Syrian regime has become increasingly comfortable with the Arab League presence, despite initial widespread reluctance to allow the observers into the country in December.

Although heavily supervised, monitors have been able to travel widely across the country and speak to those supporting the anti-government revolt, as well as supporters of President Bashar al-Assad.

An official Arab League report on the mission so far revealed that 22 monitors had quit, citing ethical reasons for doing so. Observers remain in 17 locations, including the birthplace of the revolt, Deraa in southern Syria, and the heartland of a now deadly insurgency between the fourth city of Homs in the west to Idlib in the north-west.

The mission's leader, retired General Mohammed Ahmed Mustafa al-Dabi of Sudan, had called for more monitors and a more robust presence in Syria.

Syrian demonstrators have gravitated towards the orange-vested monitors whenever they arrive in their areas, and their presence appears to have emboldened a revolt that has been subject to a relentless crackdown by security forces.

Assad supporters have also used the presence of monitors to assert their side of a narrative they believe involves western-backed Islamist terrorist gangs attempting to topple the four-decade rule of the Assad family and the ruling Ba'ath party.

Defectors from the security forces are playing an ever-increasing role in the crisis, which sees daily violence and scores of deaths in locations across the country. Armed demonstrators and defectors briefly seized control of the restive area of Douma, near Damascus, on Sunday. They have remained in control of the border town of Zabadani after a negotiated ceasefire with the Syrian military.

However, defections are almost all from the lower ranks of the army and do not yet pose a serious threat to the military, which for the large part remains loyal to the Assad regime.